Dalton can’t ignore the giant Debt in the room. It looms increasingly more threatening and must be addressed in the next budget.
The only question is whether it will be slayed with cuts, taxes or a combination of both.
Don Drummond says “we should be having that debate”. However this may be a golden opportunity to force some austerity [source - Star]:
But reflexively raising taxes will only reduce the pressure to eliminate waste, Drummond counters. It makes more sense to “keep the screws on that process,” forging a consensus to find savings and only considering tax hikes as a last resort — after Ontario gets its house in order.
And here’s the money quote from that same column by Martin Regg Cohn:
He [Drummond] recommends that everything from employment counselling to training and social services be radically overhauled, with many programs spun out to private contractors. Unions would be invited to bid (along with everyone else) for their old jobs — not at the lowest price, but with minimum government standards and value for money in mind.
Mmmm… That’ll go over well.
Will Dalton McGuinty finally find the intestinal fortitude to say ‘No’ to his buddies in the Big Public-Sector and ‘Working Families’ Unions?
If past history is any indication, I am doubtful.
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Kelly McParland jumps into the fray – Dire economic outlook puts Ontario government on notice:
If 2% growth is the best Ontario can produce, the government’s main task becomes controlling the decline — i.e trying to keep up appearances while people get used to a long-term deterioration in standards.
That’s not likely what Mr. McGuinty had in mind. While Mr. Drummond has been suggesting 30% spending cuts, Mr, McGuinty has been introducing a 30% tuition break, paid for with more borrowing. Mr. Drummond doesn’t think the province can tax its way back into health, but Liberals are already whispering about raising more revenue via corporate taxes.
And from the Red Record – Liberal spending hits a wall:
The danger is not only that Ontario could continue to be the “have-not” province it became under McGuinty’s reign. It could become a has-been province.
…One veteran Liberal is worried, however, the government has backed itself into a corner.
“It’s a dangerous game that has been set up. If we do what Drummond wants, then that means firing teachers and nurses, weaseling out of the uploading of services from municipalities and basically reducing the number of people on the public payroll,” the Grit loyalist said.
“If we don’t do what he recommends, then Moody’s (Investors’ Service, the debt-rating agency) might downgrade us, increasing the cost of borrowing.”